Financial disintermediation, or the removal of the need for bank intermediation between markets and the users of funds, has so transformed the financial system that scholars are finding it increasingly difficult to communicate about financial regulation. This article argues that legal scholars could better communicate by speaking in terms of the fundamental market failures underlying the disintermediated financial system (sometimes called the “shadow banking” system). The traditional perspectives and tools of legal scholars primarily address two market failures: information failure and agency failure. To a limited extent, they also address a third market failure: externalities. By amplifying systemic risk, however, disintermediation increases the potential magnitude of — and thus makes it even more important for scholars to address — externalities. But discussing externalities as a type of market failure can be confusing and counterintuitive because externalities are fundamentally consequences, not causes, of failures. Scholars could better communicate about the disintermediated financial system, the article contends, by denoting the cause of externalities as “responsibility failure” — a firm’s ability to externalize all or a portion of the costs of taking an action. The article also shows how a rudimentary common language using the terms information failure, agency failure, and responsibility failure could help legal scholars, and thus policymakers and regulators informed by their research, to communicate about financial regulation.